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EP77: How Blockchain Enables Peer-2-Peer Lending in Mexico

Big banks (aka the Banking Cartel) has been able to push us around for too long. With their close ties to the mafia, I mean the government, and their access to monopolized fiat money rails (SWIFT, etc)...we have had nearly no choice to build, store and transact our wealth in terms of money.

Sure, we could use cash, but that’s really inconvenient and not congruent with our 21st century, digital world. Let’s face it, we’ve been pushed in to a corner for decades. Since interest rates are so low, it means that banks may be better off (yield-wise) borrowing from the Central Banks rather than from their typical banking clients. This creates an inverse incentive for customer service and we, the historic loaners, are now seen as a compliance risk with additional complication. This means that banks become less and less willing to make small loans or accept “high risk” (ie low profit) clients as they once would.

My guest, Hayden Miyamoto, knows this all too well. His company www.fundary.com has the motto “arming the world with global decentralized credit and investments”.

He currently lives in Mexico and tells us how the local people actually save, lend and borrow money. They live entirely outside of the legacy banking system which comes with its own set of risks and expenses. Often it requires insane % of capital to borrow for a loan and the interest rates can be >100%/year.

The problem, as Hayden describes, is liquidity. Now that blockchain tech has become more accepted and better understood, the benefits have started to shine. With the ability to accept peer-2-peer, micro loans from clients around the world, Hayden and his team can offer the Mexican people APR rates far below the current market rate.

Check out these statistics:

....you can think the government monopoly on money and payment channels for this disadvantage for the poor and underserved.

Helping the poor, as we’ve seen in several other Liberty Entrepreneurs interviews, is one of blockchain tech’s main advantages. It cuts out the middleman and allows us to help each other while greatly bypassing the central authorities that have historically held us back and told us no.